Israel-Iran war to hit India’s $2 billion worth of gems & jewellery exports

The ongoing war in West Asia is expected to hit $2 billion worth of gems and jewellery exports in the near term, according to the Gem and Jewellery Export Promotion Council (GJEPC).

“Of that $2 billion, we can divert $800 million of goods, but $1.2 billion we cannot divert anywhere,” says Sabyasachi Ray, Executive Director, Gem and Jewellery Export Promotion Council (GJEPC).

In March, 20% of the gems and jewellery trade will be affected due to the war, says Ray.

India exported $29 billion worth of gems and jewellery in FY25. The US was the biggest market, accounting for $9.24 billion of exports, followed by the UAE at $7.87 billion worth of exports. However, following the US tariffs last year, the UAE emerged as India’s biggest export market for gems and jewellery, importing $8.33 billion so far in the ongoing fiscal year.

“If Dubai is affected, $8.3 billion worth of exports are affected. Dubai takes mostly what we sell in India, the chunky gold jewellery. That you cannot offload or divert anywhere,” says Ray.

Dubai acts as a hub for the entire West Asia. Indian gems and jewellery shipments first reach Dubai before they are distributed throughout the Gulf Cooperation Council (GCC).

Unlike other industries where shipping is the main transport medium, the diamond and jewellery trade happens via flights. And the closure of airspace in Gulf countries and repeated closure of airports is adding to the industry’s woes.

“Our jewellers in Dubai are facing issues in sending goods to Qatar and Saudi Arabia. All GCC buyers, including Iran, used to come to Dubai to shop for their goods. North African customers also used to come there. That has totally stopped. There are no tourists. The confidence is a bit shaken,” says Ray, adding that the disruption in diamond trading activity in Dubai has also hit hard.

Rough Diamond Traders To Enter India

Over the years, Dubai overtook Belgium to become the biggest hub for the trading of rough diamonds. “Around a decade ago, Belgium used to control 65% of diamond trading throughout the world. But after the Russia-Ukraine war, and subsequent sanctions on Russian companies, Dubai cornered the biggest share of rough diamonds coming from Russia,” says Ray.

Russia mines about 33% of the world’s rough diamond production. And this supply was entirely coming to Dubai.

Ray says that with the ongoing disruption in Dubai, several auction trading companies are trying to come to India. “They want to keep the India option open. Now, whether we can use this trading opportunity or not, for that, we must talk to the government and work it out,” says Ray. “If we can get ease of doing business like Dubai, then it is possible. We have two bourses, one in Mumbai and the other in Surat,” he adds.

Kirit Bhansali, Chairman of GJEPC, says if the war continues, the industry body will ask the miners to do the auctioning in India.

“About 90% of our rough diamonds come from Dubai. Most miners do tender only in Dubai. Two diamond auctioneers are starting in Surat next week. They are shifting goods from Dubai to Surat. The government is also supportive. They need an SEZ where they will get the rough diamond and buyers will view,” says Bhansali.